Alaron Grains and Oilseeds Comment

CHICAGO - Oct 11/06 - SNS -- Following is the grain and oilseed futures comment from Alaron Trading Corp.

Corn- Delayed one day due to our Monday holiday, the weekly export inspection report finally came out showing 39.5 million bushels of corn was inspected for near term export down 5 m.b. from the week prior and 1 m.b. under a year ago. Year to date inspections are 227 m.b. versus 158 the year prior. The slightly negative numbers come as Asian markets were on holiday last week and still demand looks good. Corn opened 4 higher Monday in sympathy with sharply higher wheat trade ending up 18 but a higher 28 cent higher wheat open Tuesday saw corn open down 2 and push to down 10 cents at midsession as wheat sold off its highs. Corn is telling us it wants to pull back with harvest going quicker now and what could be a bearish crop report by the USDA. Thursday at 7:30a central time, but watch out, further strength in wheat and corn will follow. Support now lies at 2.72 for Wednesday basis Dec. futures, then 2.62. If the wheat bubble bursts we could pull under 2.62 as harvest marches forward but long term into spring we still look for May futures so see 3.25 to 3.47.

Bean- Our weekly export inspection report showed 23.1 m.b. of beans were inspected for near term export up 1 m.b. from the week prior and 4 m.b. over the year prior. Year todate inspections are 81 m.b. versus 46 a year ago. Even with a Asian holiday inspections show strong demand. Like corn beans too followed wheat up on Monday with 12 cent gains but a weaker wheat market Tuesday gave beans 12 cent gains but a weaker wheat market Tuesday gave beans 12 cent losses at midsession. Beans look to Wed. as last chance to get positioned for Thursday's crop report which many think will come in very bearish. Plenty of room for profit taking on over bought conditions. November has first support coming into Tuesday at 5.60 then 5.55. at some point strong demand looks to take Nov. to 5.94 but we will use a correction to buy Jan. futures.

Wheat- The weekly export inspection report showed 16.9 m.b. were inspected for near term export down from 18.2 the week prior and 27.7 a year ago. Year to date inspections are 297 m.b. versus 355 a year ago. No surprise here demand is weak as prices are through the roof. On my Friday report I said watch out for Australia's next grain production announcement that rumors were it could be 10 m.m.t. or less. Well, word came out Sunday from Australia it could be under 10 m.m.t. and this shot prices up the 30 cent limit. Tuesday saw 29 cents higher the first five minutes then profit taking followed by buying and profit taking two more times as the day went on. Everyone wants to know where is the high? No one knows that, but the funds will push it as far as they can. Consider this: this last Australian crop production estimate could be the last one for awhile or at least this week as harvest traditionally begins mid-month. Funds may see this as closest to the final production number we will get and take more profits giving us a near term top. Bull markets die hard so it will take a higher open and lower close to yank the funds out. Support on Dec. CBT futures lie all the way back at 5.64.

Tim Hannagan

Alaron Research Team

800.563.9510

thannagan@alaron.com

www.alaron.com

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